LUSAKA, Zambia, December 3, 2008/African Press Organization (APO)/ — Zambia and the African Development Bank (AfDB) Group on Tuesday in Lusaka, signed a US$ 24 million Loan Agreement to finance the country’s Second Poverty Reduction Budget Support (PRBS) program, which aims at developing the private sector and improving public finance management.

The agreement was signed by Zambia’s Minister for Finance and National Planning, Situmbeko Musokotwane and the AfDB’s Resident Representative in Zambia, Vivienne Apopo.

The Zambian government also signed on to the African Legal Support Facility (ALSF), a collective fund set up to assist Regional Member Countries (RMCs) of the Bank in addressing capacity issues while dealing with the growing problem of litigation by vulture funds, as well as to enable them build the technical capacity for complex commercial negotiations. The ASLF is particularly relevant for countries such as Zambia with natural resource-based economies that are constantly targeted by international speculators.

On the occasion, Mr. Musokotwane and the World Food Programme (WFP) Country Director, Pablo Recalde, signed a memorandum of understanding on a framework for the administration of the Bank’s US$ 500,000 humanitarian assistance grant to flood victims endorsed by AfDB President Donald Kaberuka during his official visit to Zambia in August 2008.

Commenting on the event, the minister thanked the Bank Group for its continued support to Zambia’s development efforts, especially within the framework of the Fifth National Development Plan. He assured that the loan would be used to finance poverty reduction and economic growth projects. He emphasised the importance of the timing of the support considering that Zambia, like many other developing countries, was facing a number of challenges in the wake of the current global financial crisis.

Furthermore, Mr. Musokotwane commended the Bank for spearheading the African Legal Facility, noting that many African countries had lost huge resources in contracts and negotiations mainly due to limited internal capacity to negotiate and conclude beneficial deals for their countries. He also thanked both the Bank and the World Food Programme for the Humanitarian Assistance to the flood victims.

For her part, the AfDB Resident Representative, Vivienne Apopo, congratulated the government on the success of the recent presidential by-elections, and thanked them for continued support to Bank Group activities in Zambia and the African region. Mrs. Apopo observed that since Zambia’s economy relies mainly on the exploitation of natural resources, especially metals, the African Legal Support Facility would be handy in assisting the government in building the necessary capacity for effective negotiations and preparation of beneficial international contracts for managing its natural resources.

She thanked the WFP for its cooperation and readiness to administer the humanitarian assistance grant to flood victims. Mrs. Apopo re-affirmed the Bank’s commitment to supporting Zambia’s socio-economic development efforts.

WFP Country Director, Pablo Recalde thanked the Bank Group for the timely assistance to vulnerable groups in the country, facing many social and economic challenges that are threatening the achievement of the Millennium Development Goals.